Rick Joswick, Head of Global Oil Analytics at S&P Global Platts Analytics said:
- Although the details have not yet been released, it appears to be narrowly targeted and thus should not directly affect Russian commodity exports
- However, it will likely make many buyers more hesitant to purchase Russian oil
- That will tend to drive down the price of Russian crude oil even more until it ultimately clears outside of its traditional markets in Europe
- Urals were already at record discounts to North Sea grades in prior days
- Another affect is that regular buyers of Russian oil, primarily in Europe, will seek non-Russian alternatives
- That will tend to support the price of Brent crude and the broader market
Fishman said the Western response is on a «conveyor belt to Iran-style sanctions» unless Putin backs down in the coming days.
Bob McNally, president of Rapidan Energy Group, said:
- The SWIFT move will further deepen the already-wide discounts that Russian oil exporters face as oil banks and traders back away
- The US and Europe are hoping to keep Russian oil and gas flowing but drive down Moscow's revenues
EC Commission President Ursula von der Leyen said during a press conference streamed online:
- We will paralyze the assets of Russia's central bank
- This will freeze its transactions and it will make it impossible for the Central Bank to liquidate assets
- And finally, we will work to prohibit Russian oligarchs from using their financial assets on our markets
Germany had been a holdout to the idea, with its Foreign Minister, Annalena Baerbock, expressing reservations as recently as Feb. 25, telling a German TV station that excluding Russia from SWIFT could harm Germany's energy supplies.
But Baerbock changed her tune in tweets Feb. 26 that said the country was working on a «targeted and functional» approach that would limit collateral damage.
Crude and petroleum product largely moved lower Feb. 25 as the sectors weigh international sanctions and the fallout from Russia's ongoing invasion of Ukraine.
NYMEX April WTI settled $1.22 lower at $91.59/b on Feb. 25, and ICE April Brent fell $1.15 to settle at $97.93/b.
European gas prices are following oil upwards on concerns over supply security.
Platts assessed the front-month gas price on the benchmark Dutch TTF hub at Eur115/MWh on Feb. 24, up by 30% on the day and by 77% from the start of the year.
Platts assessed the JKM LNG benchmark for April deliveries at $36.90/MMBtu on Feb. 24, up by 32% on the day.